The Arizona Veterans Service Commission bungles the estates of its incapacitated wards

Three days after the hearing, Franks sent a stinging letter to longtime AVSC director Norm Gallion. In it, she referred to "shocking evidence" about the agency's actions in the Cousino case.

"I have decided that this court simply cannot continue to appoint AVSC as a conservator for protected persons," Franks told Gallion.

That's because the Cousino case is no aberration. In preparing this story, New Times examined more than 80 files and uncovered numerous inaccuracies, misstatements, routinely late filings and other basic shortcomings.

"We have been asked by AVSC to approve some of the most slipshod filings you've ever seen in case after case after case," Franks tells New Times, "and I was very frustrated. Then came the Cousino hearing, and I find out it's not just poor bookkeeping, but it's stealing out of other wards' assets to cover their mistakes. The whole reason for their existence is to serve veterans. But I've just never seen such appalling mismanagement."

Most of the wards have modest estates, but the amount of money AVSC controls is substantial. In September 1997, the balance in its fiduciary-unit checking account totaled $1.9 million. The unit processes about $600,000 monthly in cash receipts and disbursements.

Franks knows her decision will have ramifications for many Maricopa County veterans, and is likely to put a strain on the county Public Fiduciary, which will get some of the veteran referrals that formerly went to AVSC.

But she is resolute.
"This court will not appoint AVSC on new cases," the judge says, "until AVSC provides accountings showing that it has repaid the many wards the money it owes them due to improper accounting practices, and provides the court with proof that new, proper accounting procedures are in place."

Franks' decision came on the heels of a damning February 20 report on AVSC by the state auditor general.

It concluded:
"[AVSC] has not met its fiduciary duties or its statutory responsibilities. . . . The fiduciary division did not satisfy its legal obligations to administer and protect the assets of those veterans or their dependents that the court has deemed unable to handle their own affairs."

In other words, AVSC's record of looking after its wards--some of society's most vulnerable citizens--has been dismal. And, until recently, those with oversight over AVSC--the courts, elected officials, the Governor's Office, the federal Department of Veteran's Affairs--did little to try to right the ship.

Director Gallion says he is "very concerned" about the auditor general's findings, and with Judge Franks' decision.

"We take our fiduciary responsibilities very seriously," he says. "Our clients served their country when called upon to serve, and we shall continue to provide the best possible service to them with compassion and dignity within the constraints of personnel staffing and appropriate funding."

AVSC board chairman Carroll Fyffe concedes AVSC's track record has been less than stellar. But he promises it will improve dramatically.

"Things have happened that make us look sort of bad, that's very clear," says Fyffe, a Sierra Vista resident and past president of the Military Order of the Purple Heart.

"But we have to get the problems solved. We're not a bunch of thugs out to take money from veterans. We're working closely with the Governor's Office to correct things, and quickly, by 1 July. We've done some things wrong, but unintentionally, without maliciousness. I believe in my heart that no veteran has suffered because of us. And I also believe [Judge Franks] jumped the gun with the moratorium, and I think her letter of March 26 to Sue Cooper is an admission of that."

Fyffe is referring to Franks' apology for berating Cooper concerning another case in which a vet's annual accounting hadn't been filed on time. AVSC attorney Harold Merkow's explanation in that case led to her narrowly framed letter of apology.

"It irritates me no end that [Fyffe] would tell you that my letter to Ms. Cooper shows that I 'overreacted' when establishing the moratorium," Franks says. "If anything, I delayed too long in doing so because this court and Arizona's veterans need AVSC. With the current chaos and mismanagement, however, I remain firmly convinced that I would be doing more harm than good if I appointed AVSC as a veteran's conservator. It would be a breach of my fiduciary duty to the protected person."

Franks points out that the fiduciary duty--the word comes from the Latin fidez, which means faith, honesty, confidence, trust, honor--is profound: "You just can't blow away someone's assets like AVSC has done. It's against the law, and it hurts people."

AVSC first came to the public's attention in a New Times story about Donald Ellison's tragic and preventable death ("A System Gone Mad," October 24, 1996).

It described how AVSC--Ellison's guardian/conservator--and the mental-health agency known as ComCare had failed to care for the seriously mentally ill Vietnam veteran. Ellison collapsed on a Phoenix street on a 109-degree day in July 1996, one day after his release from Maricopa Medical Center's psychiatric ward. He died a few days later.

AVSC also squandered thousands of dollars of Ellison's meager assets in his final years.

In a subsequent story ("Sins of Commission," November 21, 1996), an attorney hired by AVSC in late 1995 to run the agency's fiduciary unit told how director Gallion had ignored her complaints about the agency's slipshod accountings, haphazard case management and an oppressive case load.